In the home console market, Switch only replaced the Wii U.
Speaking more broadly, a big problem in the gaming community is that many have a hard time to accept that the following statements can all be true at the same time:
1. Switch replaced both the 3DS and Wii U.
2. Switch replaced the Wii U in the home console market. (The home console market is the topic of this thread.)
3. Switch replaced the 3DS in the handheld console market.
4. Switch is not a home console.
5. Switch is in the home console market.
6. Switch is not a handheld console. (Only Switch Lite is.)
7. Switch is in the handheld console market.
Despite this thread being about the home console market, there have already been gen over gen comparisons for all three options:
1. Home console market
2. Handheld console market
3. Console market as a whole
It's all done correctly, because Switch's 14m in the home console market and Switch's 17m in the handheld console market don't add up to 31m in the overall console market. It's somewhat comparable to a survey question where multiple answers are allowed, so the percentages of the given answers don't add up to 100% like in a poll where only a single answer can be given.
I actually agree with all your 7 points. The part where we disagree is that you think it is okay to use Switch numbers when talking about home console and handheld markets separately, but as many people have already pointed out, that will only give you a distorted perception of the market as a whole.
"How is the home-console market doing? Oh, it is doing great! We have sold 14m units so far."
"Cool! how is the handheld market doing? Oh, it is also doing great! We have sold 17m units so far."
Do you really not see what is wrong with that approach? Both statements make it sound like everything is going better than it really is.
Yes, Nintendo has nothing to worry about this generation but Sony and MS do, as it is quite evident that Japanese audiences are shifting away from traditional home consoles.